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No, you are not taxed on the 401K distribution if you roll it over to your IRA within 60 days of your distribution. At this point it would be considered a rollover, which is nontaxable transaction.
In TurboTax, once 1099-R reporting 401K distribution is entered, if code G reports your transaction, the rollover is automatically applied and the income is not taxable.
Otherwise, you will be asked what you did with the money. Once you answer
that you moved the funds to another retirement account, the distribution
becomes rollover and is not taxable
To enter your 1099-R:
See the screenshot below.
No, you are not taxed on the 401K distribution if you roll it over to your IRA within 60 days of your distribution. At this point it would be considered a rollover, which is nontaxable transaction.
In TurboTax, once 1099-R reporting 401K distribution is entered, if code G reports your transaction, the rollover is automatically applied and the income is not taxable.
Otherwise, you will be asked what you did with the money. Once you answer
that you moved the funds to another retirement account, the distribution
becomes rollover and is not taxable
To enter your 1099-R:
See the screenshot below.
It shows up in Turbo Tax as taxable dollar amount even though the Code G is entered. It looks to me like I am paying tax on it even though it was rolled over in the 60 days.
@centers wrote:
It shows up in Turbo Tax as taxable dollar amount even though the Code G is entered. It looks to me like I am paying tax on it even though it was rolled over in the 60 days.
If you are looking at the summary screen it will show all income you have reported. Look at your actual tax return Form 1040 on Lines 4b or 5b to see if the the distribution is being entered as taxable income. If there is no amount entered on Lines 4b or 5b then it is not taxable income.
(Lines 4a and 4b for an IRA distribution. Lines 5a and 5n for a pension or annuity distribution)
Click on Tax Tools on the left side of the screen. Click on Tools. Click on View Tax Summary. Click on Preview my 1040 on the left side of the screen.
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